FSCS says additional Keydata levy is unlikely
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The Financial Services Compensation Scheme says an additional industry levy to pay Keydata claims is unlikely.
However the FSCS says in recalculating existing levy payments some firms might see an increase in their levy to cover other firms’ share reducing.
The FSCS has today published an update on firms who resubmitted their tariff data, on which the £326m industry levy to mainly cover the cost of Keydata claims was based.
It was thought earlier this year that the FSCS may look to raise an additional levy on top of the £326m interim industry levy announced in January.
FSCS chief executive Mark Neale says: “It is too early to say whether rebates to firms who submitted incorrect tariff data will lead to a fresh levy on other firms. That is because there are other factors that will impact on the final reckoning, including, the amount we have received in recoveries and the total amount paid in compensation.
“We do not expect to need any further funding in respect of Keydata on top of the £326m levied in January. But, as we have explained, this is a zero sum game so there may be a need for some firms to contribute more if other firms’ share reduces.”
The FSCS changed the way it calculates levies for advisers earlier this year from the number of registered individuals at a firm to the amount of eligible income it generates. Many advisers complained their levy had risen dramatically due to mistakes they made in submitting their data. In February, the FSA and the FSCS sent an open letter telling firms they could resubmit their tariff data for the 2010/11 levy period.
In its annual report and accounts the FSCS revealed that it had set aside £30m to repay firms who had been overcharged on its share of the interim levy. Firms applied for refunds totalling £80m based on resubmitted tariff data.
The FSCS expects to have written to all firms who have resubmitted tariff data by the end of August. If firms need to supply the FSCS with more information, they have 30 days to do this. If a firm is unhappy with the FSCS’ decision on whether to accept the resubmitted data and recalculate their share of the levy accordingly, firms will have a further 30 days to ask for the decision to be reviewed.
The FSCS says firms will be made aware of refunds or additional charges by the end of the year.
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